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Russia’s famously creaky legal system will be put to the test on July 17 with an asset recovery case – and according to A1, the specialist distressed asset firm that is part of Alfa Group, it will pass.

The case smacks of poacher turned gamekeeper: A1 is the M&A arm of Alfa Group (and as Alfa Ekho, was the first company the founders of the group, who include oligarch Mikhail Fridman, set up). Suffice to say, Alfa Group didn’t cover itself in corporate governance glory in the 1990s.

Sean Quinn, the founder of the group, defaulted on loans worth €2.8bn from the Anglo Irish Bank, which went bust and its assets were taken over by IBRC, which has since been trying to convert them back into cash.

The trouble is that Quinn has not been playing ball. The ownership of most of the assets has been transferred to a number of shell companies and the IBRC has been struggling to make much headway through the Russian legal system. So earlier this year it turned to A1, which is run by one of the three original founders of Alfa Group, Alexei Kuzmichyov.

On July 17, the courts in the regional capital of Kazan will decide in a key case in A1’s campaign in a dispute involving the $60m state-of-the-art logistics park Q-Park, which the Quinn Group built in Kazan, the capital of the Republic of Tatarstan, Russia.

The problem is that the ownership of the park passed from a Quinn Group holding company called Demesne (held via a subsidiary called Logistika), which now belongs to IBRC, to several shell companies that A1 believes are still under the control of Sean Quinn, putting the park out of the reach of creditors.

A1 said in a statement: “It later turned out that on May 11, 2011 the shares of ZAO ‘Logistica’ have been sold to Sean Quinn, Jr.; on June 3, 2011 shares were resold to ZAO ‘Vneshkonsalt’ and in fall of 2011 sold to two Panama companies – Forvar Overseas S.A. and Lockerbie Investments S.A. These acts were allegedly committed in order to eliminate the [IBRC] from the corporate control of ZAO ‘Logistica’ and foreclosure on the assets of ZAO ‘Logistica’.”

Two shell companies – Vneshkonsalt and another creditor to many of the disputed assets, Stroitelnie Tekhnologii – are names that have come up again and again as the owners of almost all of the disputed assets, including Q-Park, according to A1.

A1 says that it doesn’t know who is behind them, but believes they are answering to Sean Quinn. Indeed, both Sean Quinn and his son were arrested last year in Ireland for attempts to receive rental payments for the disputed properties in Russia and Ukraine in violation of the bankruptcy proceedings. “The holdings and properties have been moving in mysterious ways,” says Andrei Polyakovsky, spokesperson for A1. “What we are certain of is that a misappropriation of funds by an unknown group is taking place”.

A1 is trying to prove that Q-Park still owes Demesne $60m from credits for construction and working capital loans, then it can take back control of the park, put its own administrator in and start preparing the company for sale.

All in all, IBRC and A1 are trying to recover 12 assets in Eastern Europe (11 in Russia and the Ukraina shopping mall in Kyiv) collectively worth some $500m. Q-Park is the second most valuable, but the most expensive is the Kutuzov Towers in central Moscow that is worth up to $200m by current estimates. Work on recovering that has already begun, but will take up some time to complete, says Polyakovsky.

And A1 is supremely confident that it will win, because it never loses a fight as a point of principle. This sounds boastful, but it is not an idle boast. Alfa Group was schooled in the ways of business during the chaos of the 1990s and emerged from that time as one of the most powerful conglomerates in the country with a reputation for playing hard and sometimes rough against its rivals. “A1 doesn’t lose in corporate standoffs,” says Polyakovsky. “It’s a principle in the company and part of our strength. Even if we end up losing money on the investment, we will fight within the legal field as long as we have to reach our goal. ”

This was why IBRC came to A1 for help in the first place. A1 contributed $18m to the joint venture as running-about money, plus it is spending about $1m a month on the work, according to Polyakovsky. IBRC contributed all the titles and deeds to all the assets. According to sources familiar with the deal, the proceeds from the recovery and sale of the initial property will be used to compensate A1 costs. After that, the proceeds will be shared with A1 one getting approximately 30% and IBRC getting the larger part.

You will be glad to have confirmed the identity of at least one bondholder to whom we have paid tens of billions. David Tepper has been named by Forbes as the highest earning fund manager in 2012. He, himself personally, was paid USD 2.2bn (€1.68bn) in 2012; yes, he actually earned 2,671 times Pat Kenny’s 2012 RTE fees. Forbes reports “his flagship hedge fund successfully bet on stocks and other securities at key moments in 2012, posting a net return of nearly 30%. His $15 billion Appaloosa Management has been knocking out annual net returns of about 30% since 1993”

And how is David earning 30% annual returns? We don’t have a detailed breakdown but we’ll remember David here in Ireland after his January 2013 performance on Bloomberg TV, when he told the US audience.

“We invested in the Bank of Ireland… and we bought their bonds, subordinated bonds…They [BoI] wanted to ‘cram us down’ … So we took them to court.. We were gonna go into the English and Irish courts to fight the Bank of Ireland, and fight the Irish Government for that matter…We finally won at the beginning of this year… The debt was trading at 40/50 cents…..So the Bank of Ireland this year, goes and issues a new issue, of the same debt…. a month and a half ago….the debt is now trading at 115..The only reason it is worth buying, is because we fought it, and we won”

Bank of Ireland, the bank into which we have shoveled €4.7bn gross, about €3bn net.

We have no real idea of the bondholders in Anglo, Irish Nationwide, Permanent TSB, EBS and AIB into which we have shoveled €60bn. Yes, there was a partial listing of INBS junior bondholders from Guido Fawkes which Senator Norris tried to read into the Seanad record, and was stopped, but it’s just the tip of the iceberg.

Challenge the government on this and the key defence is “think of the credit unions”, but we know they are suffering circa €15m losses on deposits at Irish Bank Resolution Corporation. The government also claim that because the banks don’t maintain lists and the banks merely pay clearing companies which then make payments to the actual bondholders, that there is no way of knowing the ultimate identity of the bondholders. Well, at least, we know David.

Despite all the Irregularities listed below nobody has yet been sent to prison.

To put this in perspective almost 200 people were jailed in Ireland for not paying court fines relating to TV licences last year.

One rule for the rich and another for the poor

‘Bankers should be technicians and functionaries who serve the public and provide guaranteed stability. They should not be entrepreneurs, gamblers, who can count on public bailouts if their speculations turn to dust.’

One of London’s most successful hedge fund managers, Patrick Degorce, has been forced to part with millions of pounds in tax after Revenue and Customs persuaded the courts to throw out a complex film

RTE – 1st March

Seán FitzPatrick facing 12 charges over financial irregularities. Former Anglo Irish Bank chairman and chief executive Seán FitzPatrick has been sent forward for trial on 12 charges in connection with alleged financial irregularities at the bank. He is accused of making false, misleading or deceptive statements in relation to millions of euro to the company’s auditors, Ernst and Young, over a six-year period. The amounts on the charges are €5.1m in 2002; €14m in 2003; €23m in 2004; €42.1m in 2005; €60.9m in 2006 and €139.8m in 2007.

Telegraph Saturday 02 March 2013

Ernst & Young to pay $123m to settle US tax shelter probe Ernst & Young has agreed to pay $123m to resolve a US federal investigation into its role developing and marketing tax shelters that helped its clients avoid more than $2bn in tax liabilities. As part of the settlement, announced by the Manhattan US Attorney’s Office, the accounting firm also entered into a non-prosecution agreement and admitted to the wrongful conduct of certain partners and employees. The settlement amount reflects the gross fees Ernst & Young earned developing and marketing four tax shelter products from 1999 to 2004, according to the nonprosecution agreement.

Telegraph Saturday 02 March 2013

Commodity giant Glencore under spotlight over Iran Glencore, the FTSE 100 commodity giant, supplied tonnes of raw material to an Iranian firm that supplied the country’s nuclear programme, it emerged. A Western intelligence report seen by Reuters described Glencore’s barter deal as a good way for Tehran to get around global financial restrictions imposed over its nuclear activities, although it did not say that Glencore violated sanctions.

March 2, 2013 Reuters –

Las Vegas Sands says “likely” violated U.S. corruption act March 2, 2013 4:39 PM ET Reuters) – Las Vegas Sands Corp said it “likely” violated the federal Foreign Corrupt Practices Act, which outlaws the bribery of foreign officials, according to a Securities and Exchange Commission filing on Friday. The filing marks the first disclosure by the casino operator, controlled by founder and billionaire Republican donor Sheldon Adelson, that is was under investigation.

Independant Thursday 5th March 2013

IBRC suing two Dubai firms in Quinn case TWO related companies based in Dubai are being sued by Irish Bank Resolution Corporation (IBRC) over their alleged involvement in an asset-stripping scheme by family members of bankrupt businessman Sean Quinn. In the commercial court yesterday Judge Peter Kelly granted an application by IBRC to join Senat Legal and Senat FZC, both of Gold and Diamond Park, Dubai, and Michael Waechter, principal of Senat FZC, as co-defendants to the bank’s action against various members of the Quinn family. The judge noted IBRC special liquidator Kieran Wallace claimed the Senat parties played “a pivotal role” in the scheme to strip assets worth up to $500m from the Quinn family’s International Property Group (IPG). It is alleged the scheme was “masterminded by one or all” of the three, the judge said.

Irish Times Thursday, March 7, 2013

Microsoft fined €561m for limiting browser choice Shares in Microsoft dropped yesterday after the European Commission imposed a €561 million fine on the company for failing to implement a previous ruling obliging it to offer users a choice of internet browsers. It is the first time the commission has been forced to fine a company for non-compliance with agreed commitments. In 2009 a European antitrust investigation found that Microsoft was unfairly tying its internet Explorer browser to its Windows operating system, and ruled that the company must give users a choice of which internet browsers to use.

The Telegraph 8th Mar 2013

Pensioners being ‘ripped off’ by profit margins on annuities Retiring workers are being “ripped off” by financial companies making huge profit margins on annuities, campaigners have warned. A Telegraph investigation has raised concerns about the profits that insurance companies and other firms are making on annuities. Only one annuities provider, Standard Life, has disclosed its margins on annuities, revealing that it pockets almost 20p of every pound a customer pays for an annuity. Other firms refuse to reveal their margins, and experts warn that the industry is concealing large profits. Ros Altmann, a pensions campaigner, said: “These huge margins are outrageous.”

The Guardian, Monday 11 March 2013

All bets are off as online gambling group Intrade launches investigation

Irish company announces it is looking into possible ‘financial irregularities’ and has ‘immediately ceased’ its trading activity Online gambling group Intrade has ceased taking bets after launching an investigation into potential “financial irregularities”.

Irish TIMES 14 MARCH 2013

THE son of bankrupt businessman Sean Quinn has provided statements of Russian bank accounts held by himself and other family members to Irish Bank Resolution Corporation (IBRC) and is anxious to finally purge his contempt of court orders, the High Court heard today.

The Guardian, Friday 15 March 2013

US hedge fund SAC pays record fine to settle insider trading allegations SAC Capital, a hedge fund run by billionaire Steve Cohen, is to pay $600m (£397m), the biggest insider dealing fine in history

The Guardian.co.uk, Friday 15 March 2013

JP Morgan faced a barrage of criticism on Friday for it disastrous “London whale” trading loss as senators and the bank’s regulator accused its executives of believing they were too big to fail, ignoring warnings about the escalating losses and deliberately withholding information. At a hearing a day after it published a damning 300-page report on JP Morgan’s $6.2bn debacle, the Senate subcommittee on investigations hammered bank executives over the affair, while regulators flatly denied JP Morgan’s claims that it had kept them informed about the mounting losses.

The TELEGRAPH 19 Mar 2013

French Budget Minister Jerome Cahuzac resigns after tax fraud probe

Cahuzac, a cabinet heavyweight, had been tasked with fighting tax evasion. He is now under investigation for holding a secret Swiss bank account. The resignation is an embarrassment and a blow to President François Hollande as his government seeks to redraft deficit reduction plans to maintain fiscal credibility with France’s euro zone partners. Mr Cahuzac was responsible for making drastic government spending cuts. He had repeatedly dismissed as “crazy” a report in December by French investigative news website Mediapart that he held an undisclosed account at the Swiss bank UBS until the start of 2010. “I have never had an account in Switzerland or any other place abroad,” he said at the time.

RTE Wednesday, 20 March 2013

Representatives of the special liquidator of IBRC served papers on three former directors of Irish Nationwide last night. It is understood the legal action relates to their stewardship of the building society. Papers were served on former directors Terence Cooney and Stan Purcell, and former chairman Michael Walsh. It is understood that it is intended that papers will be served on former managing director Michael Fingleton and another former director David Brophy.

RTE 27TH March

Britain’s financial services regulator has fined insurer Prudential £30m and censured its chief executive over its handling of a failed bid to acquire rival AIA in 2010. The UK’s Financial Services Authority fine concerned Prudential’s plans to acquire AIA, the Asian subsidiary of AIG. The bid eventually collapsed after both parties failed to agree on a price. The FSA said Prudential did not inform it of the deal – even though they held a detailed meeting only weeks before news of the deal emerged. The FSA also censured CEO Tidjane Thiam, for playing a significant part in the decision not to contact the regulator. The regulator said the deal’s size would have been the biggest in the UK and could have affected confidence in the country’s financial system.

The Guardian, Thursday 28 March

Royal Bank of Scotland is being sued for misleading investors during its £12bn emergency fundraising in 2008, in a landmark joint claim brought by Dutch bank ING and pension funds for British coal miners.

Evidence that they had no documents to prove huge cash withdrawals were used for legal fees was “inexplicable”, he said.

Mr Murphy is making submissions for the bank in an application before the High Court concerning disclosure by members of the Quinn family about alleged asset-stripping of the International Property Group of companies.

Members of the Quinn family were cross-examined for five days in January about their disclosure of assets and bank accounts.

Mr Murphy said evidence was given that huge sums of cash withdrawn in Ireland were used for legal fees, yet no bills or receipts could be accessed.

He said the “shutters had come down” with regard to the money trail and a confusing picture had emerged about what the money was used for.

Mr Murphy said there were a number of areas of concern about the level of disclosure by the Quinns and further court orders may be necessary.

Orders could be made directing Aoife Quinn to have a laptop forensically examined to retrieve deleted emails.

He said the “policy of deletion” outlined by the Quinns illustrated that full disclosure had not been made.

A number of striking features had emerged in evidence, he said, including the fact that none of the Quinns appeared to have copies of employment contracts or evidence of job descriptions, despite receiving large sums from Russian companies.

Salaries received by some of the Quinns from IPG companies were significantly larger than the Russian employees, often tenfold, illustrating that Seán Quinn Jnr played a major managerial and controlling role and not one of middle management as he had purported, he said.

There had been a lack of disclosure about the role some of the Quinns played in IPG companies, Mr Murphy said.

Documents existed that would show a level of control and leadership by Mr Quinn Jnr, Aoife Quinn and Stephen Kelly, he said.

IBRC has alleged widespread asset-stripping of Quinn companies.

The Quinns deny full disclosure has not been made.

Counsel for the Quinns, Martin Hayden SC, said the court would have to decide what exactly the order for disclosure was.

He said they were not seeking to avoid court orders or to be technical to avoid an obligation.

However, the process of disclosure differed from discovery, he said.

Disclosure orders did not go beyond the requirement of disclosing documents in the possession of a defendant, he said.

Discovery was a much broader concept, while disclosure was narrow.

The current orders being sought by the bank amounted to it seeking an “evidentiary trail to support its argument in the main action”.

Mr Hayden said it could not be a game of trial by ambush.

IBRC’s application for further disclosure orders was entirely artificial in relation to the Quinn IPG groups as the bank had already appointed a receiver over those companies and would already have the information.

Ciara Quinn, a daughter of bankrupt businessman Seán Quinn, has said she withdrew almost €340,000 from her Russian bank account via cash withdrawals from ATMs here in the space of a year, with most of that going to pay legal fees. She has no documents concerning those withdrawals or payments made from July 2011, she said.

Ms Quinn was also asked about an “extraordinary” series of withdrawals totalling €5,000 from her Ocean Bank account in Moscow, made via ATMs in Blanchardstown, Dublin, in less than 20 minutes on May 25th, 2012.

Shane Murphy SC, for Irish Bank Resolution Corporation (IBRC), asked about the purpose of withdrawals of €500 each at 16.08pm, 16.10pm and 16.11pm; of €600 each at 16.18pm and 16.19pm; €1,500 at 16.24pm; and €800 at 16.27pm.

Hugh Hartnett SC, for the Quinns, objected such questions strayed into issues to be addressed in the full hearing of the legal action by IBRC, formerly Anglo Irish Bank, against various Quinn family members and others alleging stripping of assets from the Quinns’ International Property Group (IPG).

Concerned

As a mother of three aware the bank had alleged contempt against her, and that contempt can lead to jail, Ms Quinn said she was concerned about answering some questions.

Mr Murphy yesterday cross-examined Ciara and Brenda Quinn about claims they and other Quinn family members have not fully disclosed all information relating to their assets, accounts and involvement with companies in IPG. Colette Quinn’s cross-examination began late yesterday and continues today.

The Quinns insist they have disclosed all relevant documents available. The bank sought cross-examination before the full hearing of its “conspiracy” action.

Mr Justice Peter Kelly yesterday granted an application by Paul Anthony McDermott, for the Director of Public Prosecutions, to stay the full hearing of that action insofar as it touches on issues to be addressed in forthcoming criminal proceedings against former Anglo chairman Seán FitzPatrick and two former senior executives of the bank. Those issues included alleges breaches of Section 60 of the Companies Act, which makes it unlawful for a financial institution to lend money to buy its shares.

Various preliminary matters in the conspiracy case, including cross-examination of the Quinns, may continue in the interim.

Government Ministers – estimated to be costing the Republic nearly €9 million a year – Francis Donohoe reports

Taxpayers’ money is being paid out in pensions to approximately 100 former Ministers, many of whom have lucrative new jobs and positions despite their failings as public administrators.

Former Taoiseach Bertie Ahern receives the largest state pension of €152,331 for his service as minister and TD. Other former Taoisigh receiving pensions include Brian Cowen on €151,061; Albert Reynolds, who is getting €149,740 and John Bruton on €141,849.

Former Health Minister and Tánaiste Mary Harney, who is six years short of the normal retiring age, is paid an annual pension of €129,805.

Former Tánaiste Dick Spring has a ministerial pension of €121,108, on top of his basic salary of €27,375 and €3,000 for every committee meeting he attends as public interest director at the partly state- owned AIB.

A number of prominent members of the Bertie Ahern-led governments, including Charlie McCreevy, Dermot Ahern, Noel Dempsey and John O’Donoghue are all on pensions of over €119,000.

The Workers’ Party National Organiser, Seamus McDonagh, said: “The continued payment of these pensions to former ‘public servants’ while the most vulnerable are having their services cut is obscene. The amount that will be saved if a special levy is introduced to bring these pensions down to the standard state pension will not sort out the economy but will set a moral example.”

He added: “It is our understanding that special legalisation which would tax these pensions at a special high rate can be enacted, however the Government has claimed such a change would necessitate a constitutional referendum. If so, they should let the people vote on this issue.”

LookLeft will be contacting TDs in the coming weeks to ask them to state their position on the introduction of emergency legalisation to curtail these pension payments and will publish their responses.

All five children of fallen Irish billionaire Sean Quinn, who was once Ireland’s richest man, and three of their spouses will reportedly face cross-examination about their assets in the Irish High Court this week.

According to the Belfast Telegraph the Fermanagh businessman’s sons-in-law Stephen Kelly and Niall McPartland, as well as Karen Woods — the wife of Sean Quinn, Jnr — will be questioned about missing millions in rent money allegedly generated through the family’s international property group (IPG) as well as the significant salaries they received from Russian companies.

The bank also reportedly wants documents relating to control of companies in IPG, as well as assets, bank accounts and documents relating to salaries from Russian IPG companies in 2011 and 2012.

Last summer, Quinn’s daughter Aoife said their family did not have a ‘pot of gold’ hidden away, even though members of the family had drawn down almost $4 million in salaries from a Russian company since 2011

“One hundred percent of them felt I shouldn’t be there, I certainly felt I shouldn’t be there, after creating 7,000 jobs, after never in my life did I owe anyone a penny, never in my life did I steal a penny that didn’t belong to me, I felt it was just wrong.”
Some points for Daddy Q to consider
One hundred percent of inmates agree with Quinn… Oh well Talk about ‘being thick as thieves’.

In fairness Daddy Q never took penny – It was always Euros.
Therefore, he is not lying about that.

.
Mr Quinn went on to say that, his jailing was wrong and repeated his claim that he has done everything in his power to purge his contempt of court.
Moreover, he felt it was wrong for the judge to imprison “Him” with people who had murdered people and committed horrendous crimes.

What he is saying is
I really do not give a fiddler’s fart if the truth needs massaging a bit along the way so be it. I am too good to be locked up with the likes of them.
Rich coming from a man whose exploits with Anglo and Quinn, insurance has cost you and me hard-earned money.
In reality, what daddy is doing is giving you Johnnie Citizen the fingers – If I can’t have my business you JC can pay off the money owed.
This is galling as we the citizens will be lumbered with Quinn debt for at least the next fifteen to twenty years.

The Debt Justice Action (DJA) campaign, of which I am a part, has just lodged an application with the Guinness Book of Records to recognise Ireland as having the world’s most expensive ever bank bailout.

A video accompanying the application can be viewed below. The satirical intent behind the project is well captured by DJA member Diarmuid O’Flynn: “We’ve had a difficult few years here in Ireland. Between the collapse of the banking system; Jedward at the Eurovision; and 1-6 at home to Germany, our reputation on the world stage is in tatters. That may be about to change”.

Supporters of the campaign are being urged to send the video to all TDs under the slogan of ‘credit where credit is due’. As development educator Vicky Donnelly puts it, “we should not forget to acknowledge those in positions of power, like TDs and Ministers and the Irish Central Bank – none of this would be possible without them.” In fact, the group inaugurated their bid last week with a presentation of flowers and a card to Patrick Honohan, governor of the Irish Central Bank, who personally accepted the tokens in honour of the invaluable role played by that institution in the world record attempt.

Now all of this is obviously tongue in cheek, but serious points are being made also, one of which is the responsibility of politicians and senior civil servants for the mess we are in. A small number of bankers are facing criminal charges (the cases are proceeding at a snail’s pace) but not one person responsible for regulation (or the lack of it) has been called to account. In fact, in many cases they have been rewarded.

Take the example of Kevin Cardiff, as documented by the Cantillon columnist in the Irish Times of 26 November 2011. According to that column, a strange thing happened over the St Patrick’s weekend in March 2006. The Revenue Commissioners decided they were going to levy stamp duty on the purchase of company stocks using so-called ‘contracts for difference’ (CFDs). CFDs allow people to buy shares in a company while only paying a fraction of the cost up-front, borrowing the rest and betting that a rising share price will allow a handy profit to be made – because under the contract the seller agrees to pay the buyer the difference between the current value of the share and the value when the contract comes to an end. This is how Sean Quinn built up his huge stake in Anglo Irish Bank.

The Irish financial sector went ballistic over Revenue’s actions and took their grievances to Mr Cardiff, then working in the tax policy section of the Department of Finance. Cardiff listened sympathetically and wrote a note to his Minister (Brian Cowen at the time) saying that the proposed change “was causing consternation in the market for Irish shares” and that the suffering sector would be forced to move its business to London or elsewhere if Dublin continued to squeeze the life out of it. Cowen took his official’s advice and scrapped Revenue’s proposal. On 30 March Tom Healy, chairman of the Irish Stock Exchange wrote to Cardiff as follows: “Kevin, I would like to thank you for getting the CFD problem resolved. We had the very clear impression that you were the one who fixed it. I will contact you soon to propose lunch”.

Now it is entirely possible that Quinn would still have built up his ultimately catastrophic shareholding in Anglo even if the stamp duty on CFDs had been kept in place and that the state (in the form of Anglo’s successor the Irish Bank Resolution Corporation) would still be pursuing Quinn for money he owes us (on the grounds that we now own Anglo). But it is also possible that the duty would at least have slowed this form of speculation and spared us some of the costs we are now bearing. So, overall, this was probably not a particularly good call by Cardiff. Not that he personally lost out as a result: doubtless he had a nice lunch with Mr Healy, but his more tangible reward was to be made head of the Department of Finance, in which capacity he advised on the economy-wrecking bank guarantee of September 2008. Again, this did not derail his glittering career and in 2011 the Fine Gael-Labour government nominated him as Irish representative to the European Court of Auditors, a position he ultimately secured despite understandable reservations on the part of some European Parliamentarians.

This saga tells us a number of important things. One is the intimate links between the Irish financial sector and the senior civil servants who were supposed to be regulating it (not pandering to its demands), links that remain institutionalised today. Another is the aforementioned impunity, or even reward, enjoyed by those who screwed up at the top decision-making levels. Even the much criticised former Financial Regulator, Pat Neary, got a pay-off of €630,000 when he was forced to retire in January 2009 – and a pension on top of that of €143,000 a year; this for a man whose idea of regulating the sector was to say that he operated on the basis of “mutual trust between ourselves and the industry”.

But another thing the Cardiff debacle tells us is this: the current government is perfectly happy to go along with protecting and promoting those who helped wreck our economy. And one reason for that is that the intimate links that bind together bankers, politicians and senior civil servants were not, and are not, confined to one political party. Consider the case of current Minister for the Environment Phil Hogan (also the Minister for Not Housing Travellers). He personally received ‘soft’ loans of almost €900,000 from the head of the Irish Nationwide Building Society Michael Fingleton. Fingleton gave Hogan the wherewithal to buy a house in Dublin 4 and a luxury apartment in Portugal with loans to initially be repaid on an interest-only basis and, in the case of one of the deals, very little of the paperwork one might normally expect. So do you think Hogan is now going to be pushing his cabinet colleagues to launch a serious investigation into the roots of the Irish banking crash? When he benefited personally from the reckless lending practices that sowed the seeds of disaster?

The Irish financial, political and civil service elite got us into a terrible economic mess. But they have not been made to pay for their sins of commission or omission. Nor are they even now being held to account by the media (never mind the courts). Instead, they are allowed to make deeply misleading statements and get away with them; for example, ministers are now routinely claiming that the Anglo promissory note of €3.06 billion was not paid in March of this year, when in fact it was paid in full. The Government borrowed the €3.06 billion from Nama. Following this, Nama passed this debt to Bank of Ireland, so now, instead of owing €3.06 billion as a promissory note, which might easily have been written off, the state owes the same amount to Bank of Ireland in the form of a sovereign bond, which is much harder to write off. And this is the type of disastrous ‘deal’ the government is now seeking for the entirety of this illegitimate debt.

Going back to the world record attempt, the only comparable bank-related record listed by Guinness concerns the removal of $70 million from the Banco Central in Brazil in 2005. In that case, people removed large sums of cash from a bank, whereas the money in Ireland’s record-breaking attempt has been going in the opposite direction. What the two records do have in common is that the money has yet to be recovered and the culprits remain at large, not alone showing no remorse whatsoever but continuing to actively scam the general public. We have let them away with it for far too long.

This financial rescue was in the form of IOUs at a cost of €31 billion to the taxpayer. The promissory notes were given to make a zombie bank solvent as it now had an asset and it was on this basis that the Central Bank lent the IRBC €31 billion, which is then paid on to third-party bondholders.

Under article 123 of the Treaty of the European Union it is expressly forbidden for a Central Bank to lend to an insolvent credit institution like Anglo. The clever promissory note ruse circumvented this prohibition.

While matters were kept within EU rules, Anglo was made to look solvent so that the Central Bank could give it the money to repay its bondholders.

The European Central Bank had no banking default nightmare to deal with, but the Irish people were on the hook for the whole amount. And so every March the Irish people must repay over €3 billion.

And the payment is not to anybody. The money is just destroyed (taken out of the system). The sick are not treated, the young are not educated, hundreds of thousands face unemployment and emigration and at least one in five private residential mortgages are in severe trouble – and we burn €3.1 billion!

This is a truly staggering amount of money. A billion is a difficult number to comprehend but one US marketing agency helped demystify its sheer magnitude as follows: “a billion seconds ago it was 1959, a billion minutes ago Julius Caesar was alive, and a billion hours ago our ancestors were living in the Stone Age”.

Seven hospitals

The sum to be paid in March could build seven national children’s hospitals – and we are to repeat this insanity every year!

This all-too-smart accountancy trick destroyed our national finances and has led to the loss of our economic sovereignty.

So in this context we are duty bound to ask ourselves whether it is acceptable to pay out the €3.1 billion next March to get nothing in return.

To answer such an important question we ought to look at both sides of the story.

There is an established argument which supports the payment. It is this – we agreed to pay and we are bound by that agreement. There is force to this argument. If we cannot be sure that people will honour their commitments this makes us less likely to trade or exchange with them and that is damaging to us all.

But the law has always recognised that a party to a contract must have agreed to its terms. If a party has not agreed then the contract is not a contract at all and the party is not bound.

Did the Irish people, who must make these staggering payments year on year and for no benefit, agree to be bound in this way? It appears to me that the Irish people did not.

The Constitution, which forms the basis of how we operate as a nation, created a number of institutions of State and mandated those institutions to operate according to defined roles.

One of those institutions is Dáil Éireann. It is the most important of all the institutions for it is the “law-making” body. Apart from making the laws the Dáil has a very important power. The Dáil holds the chequebook.

Like all other democratic systems around the globe the people’s elected representatives must agree to the spending of public monies and that is a solemn responsibility placed on the Dáil.

Put simply, no minister can spend a cent of public money unless the Dáil has approved such spending.

Did the members of Dáil Éireann vote to make and provide the promissory notes or did they vote on any payment made on foot of the notes? It is critically important that the people of Ireland realise that the answer to this question is that the elected members of the Dáil never voted to make those promissory notes and have never authorised payments on foot of them.

It was the minister for finance alone who made the notes and who then made payment on foot of them. The lawfulness of this unprecedented situation will be tested in the courts early next year.

In simple terms, the question posed to the High Court relates to the essence of our democratic system. Can the elected representatives of the people of Ireland be bypassed when making such monumental decisions affecting the people for generations to come?

‘Inability to pay’

Pat Rabbitte is the first senior member of the Government to flag the country’s “inability to pay” argument. Provided this does not turn out to be a dressed-up reinvention of “kicking the can down the road”, it is to be welcomed.

But surely the same principle can and should be applied to our own people struggling to save their homes?

It is expected that the latest Central Bank figures will show a further escalation in mortgage arrears for homeowners and this is when the Government has decided to unleash a property tax.

There is no reality in expecting people in significant mortgage arrears to pay this tax when they already are unable to pay their mortgages.

This tax will only pile on further misery on middle-income Ireland, and is akin to throwing water on a drowning man.

Surely our country’s struggling homeowners also should be entitled to plead “inability to pay”.

Vincent Martin is a practising barrister and co-founder of New Beginning, an advocacy group founded to campaign for Ireland’s financial recovery by reaching a fair solution to over-indebtedne ss

Lurking among the corpses are the body snatchers....plotting their next venture into the graveyard....the blood in your veins will run cold, your spine tingle, as you look into the terror of death in tonight's feature....come along with me into the chamber of horrors, for an excursion through.... Horror Incorporated!